Senate GOP Wants Cuomo to Remove Utility Fee

1:09 AM, Feb 6, 2013   |    comments
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By Jon Campbell, Albany Bureau

ALBANY -- Senate Republican Leader Dean Skelos said Tuesday he considers extending a state surcharge on utilities to be a new tax, and his conference called on Gov. Andrew Cuomo to take it out of his $136 billion budget plan.

Cuomo's 2013-14 budget proposal extends a charge on power, steam and private water utilities that his office estimates would increase the state's revenue by $500 million a year. The surcharge had been set to expire in March 2014, while Cuomo's plan would extend it to 2019.

Senate Republicans held a news conference at the Capitol to knock the extension, which they said imposes an unnecessary burden on power utilities and businesses.

"Allowing this tax surcharge to expire will make New York more economically competitive, reduce costs on businesses, help expand our economy and create new private-sector jobs," Skelos told reporters.

The 18-a assessment surcharge, as it's known, is 1 percent of a utility's operating revenue. It was passed in 2009 to help fund the state Public Service Commission and plug budget holes. Republicans have previously called for its repeal, keeping it out of their own budget proposal last year.

Skelos, R-Nassau County, said he believes the 18-a extension would be a new tax. Cuomo's office has disagreed, maintaining the governor's spending plan does not include new taxes.

Cuomo's office signaled Tuesday that it would be willing to negotiate with Republicans to remove the fee if they can find a way to replace the lost revenue in the budget.

Business groups have given a generally favorable to response to Cuomo's budget but have raised concern about the utility fee, citing its effects on ratepayers. More than a dozen groups -- including The Business Council and Unshackle Upstate -- sent a letter to the governor Tuesday, praising his budget for "an unprecedented commitment to fiscal discipline" while asking him to reconsider the surcharge.

"When this temporary fee was imposed, there was an explicit promise to the people of the state that this assessment would not be permanent," the letter reads.

Others are pushing for the fee to remain in place. Ron Deutsch, executive director of labor-backed group New Yorkers for Fiscal Fairness, said keeping the surcharge in place would prevent further cuts to social programs.

"We support the governor continuing that in his budget proposal so we're not leaving a half-a-billion-dollar budget gap," Deutsch said. "We do want to see it continued as opposed to additional cuts to services that have already been slashed to the bone already."

Senate Energy Committee Chairman George Maziarz, R-Newfane, Niagara County, said the assessment fee is the "worst" of the taxes and fees that hit utility companies and ratepayers.

"This tax hits every single business and residence in our state," he said.


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